Hosni Mubarak launched his counter-revolution today, sending waves of armed thugs to do battle with pro-democracy demonstrators in Cairo and other cities. The attacks, reportedly involving plainclothes police and vigilantes as well as pro-regime citizens, appeared to be carefully co-ordinated and timed. And the army, which only days earlier had sworn to protect "legitimate" rights of protesters, stood back and watched as the blood flowed.

This ugly turn of events should come as no surprise. What is unusual is that the regime tolerated such levels of unrest for nearly a week.

Mubarak was never quite a dictator in the Saddam Hussein or Robert Mugabe mould. His rule was more akin to the semi-enlightened despotism of an 18th-century European monarch. But at bottom, it always depended on coercion and force. Today, the pretence of reasonableness was torn away. His dark side showed for all to see.

Mubarak's speech to the nation on Tuesday night was widely misinterpreted. The president was, by turns, angry, defiant and unrepentant. He offered no apologies, proposed no new initiatives, gave no promise that his son Gamal would not succeed him, and instead lectured Egyptians on the importance of order and stability (which he alone could assure).

He appeared not to have learned anything from the past week. And his one "concession" – that he would not seek re-election – was no concession at all. After all, he had never said he would.

This was not the performance of a defeated man. Mubarak may be down but he's not out. And judging by today's events in Tahrir Square, he and the military-dominated clique around him clearly feel they have done enough, for now, to get the Americans off their backs, flex their still considerable muscle, and reclaim the streets for the regime. All the talk about reform and elections and negotiations can wait, whatever Barack Obama says.

Today's immediate message to the people from an unvanquished, still vicious regime: it's over – go home, or else.

There's a good to middling chance the counter-revolution strategy will work, given time. "Imagine yourself as Hosni Mubarak, master of Egypt for nearly 30 years. You're old, unwell, detested and addicted to power," wrote Wall Street Journal columnist Bret Stephens.

"You could have orchestrated a graceful exit by promising to preside over free and fair presidential elections later this year – elections in which the Mubarak name would not be on the ballot. Instead you gambled that you could ride out the protests and hold on. It's a pretty good gamble ..."

Reasons for believing Mubarak can not only survive the next eight months but also exert decisive, possibly fatally obstructive influence over Egypt's new direction are plentiful. As matters stand now, the regime is unreconstructed, the opposition is split, and the Americans are undecided. Despite his insistence on a swift, orderly transition, Obama has not withdrawn his personal support. In Brussels today, the EU also declined to demand Mubarak's immediate resignation. David Cameron said reforms must be implemented faster.

All of them got a dusty brush-off. In an official statement, the Egyptian foreign ministry, still led by an old Mubarak crony, Ahmed Aboul Gheit, rejected US and European calls for the transition to start now. Calls from "foreign parties" were "aimed to incite the internal situation," it said. In other words: get lost.

Mubarak and his close confidant and deputy, Omar Suleiman, have more cards to play as they foment a backlash and seek to regain control. As in the past, they can play on Israeli and American fears of an Islamist takeover. They can point out just how disastrous it might be if a new government tore up Egypt's peace treaty with Israel.

The opposition leader, Mohamed ElBaradei can easily be portrayed as untrustworthy. In fact, such a campaign is already under way. The Americans, for example, suspected him of pro-Iranian bias when he headed the UN's nuclear watchdog – and believe, too, that he is far too cosy with Turkey's neo-Islamist leaders.

As he tries to reassert his primacy, Mubarak can rely on the conservative Arab states of the Gulf, Saudi Arabia, Libya and Algeria, and on any number of African governments that have no wish to encourage popular revolution. Even old enemy Iran is privately ambivalent on this score.

He can offer negotiations to the opposition and hope to gain advantage from their refusal, so far, to participate. And if all this fails, the regime can always let loose its thugs and hooligans, just to emphasise that without state-imposed order, only chaos, not democracy, reigns.

Mubarak's counter-revolution is still a long shot. Too much has changed in Egypt for it ever to go back the way things were. But today saw the beginning of a new stage in a complex internal struggle whose ultimate outcome remains deeply uncertain.